Market Insights Financial Capital Raising Traditional Capital Raising

Venture Capital - Germany

Germany

Germany is projected to reach a Total Capital Raised of €2.55bn in the Venture Capital market market by 2024.
The Later Stage market is expected to dominate the market in Germany with a projected market volume of €1.22bn in 2024.
In global comparison, the United States is forecasted to generate the most Capital Raised with €126,700.0m in 2024.
Germany's Venture Capital market is witnessing a surge in funding for tech startups, particularly in Berlin, solidifying its position as a leading innovation hub in Europe.

Key regions: Europe, United States, United Kingdom, Australia, Brazil

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Analyst Opinion

The Venture Capital market in Germany has been experiencing significant growth in recent years, driven by a combination of customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: German investors have shown a growing interest in Venture Capital as an alternative investment option. This shift in preference can be attributed to the potential for high returns on investment and the opportunity to support innovative startups. Additionally, German investors are increasingly recognizing the importance of diversifying their investment portfolios and are turning to Venture Capital as a means to achieve this.

Trends in the market: One of the key trends in the Venture Capital market in Germany is the focus on technology startups. Germany has a strong reputation for innovation and technological advancements, and investors are keen to capitalize on this potential. As a result, there has been a surge in funding for startups in sectors such as fintech, e-commerce, and artificial intelligence. Furthermore, there is a growing trend of international investors, particularly from the United States and China, investing in German startups, further fueling the growth of the Venture Capital market.

Local special circumstances: Germany benefits from a robust ecosystem that supports the growth of startups. The country has a strong network of research institutions, universities, and incubators that foster innovation and entrepreneurship. Additionally, the government has implemented various initiatives to promote the startup ecosystem, such as tax incentives and grants. These factors have created a favorable environment for startups to thrive, attracting both local and international investors.

Underlying macroeconomic factors: The strong performance of the German economy has played a crucial role in the development of the Venture Capital market. Germany is known for its stable economic growth, low unemployment rate, and high levels of research and development expenditure. These factors contribute to a favorable investment climate and provide a solid foundation for startups to grow and succeed. Furthermore, the low interest rate environment in Germany has made Venture Capital an attractive investment option for investors seeking higher returns. In conclusion, the Venture Capital market in Germany is experiencing significant growth due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The focus on technology startups, the strong startup ecosystem, and the favorable economic conditions have all contributed to the development of a thriving Venture Capital market in Germany. As the country continues to foster innovation and entrepreneurship, it is expected that the Venture Capital market will continue to expand in the coming years.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.